In a dispute over land, the Supreme Court ruled that an unregistered deed of donation does not automatically grant a better right to possess the property than the rights of the heirs of the registered owner. The Court emphasized the importance of registration to protect property rights against third parties, highlighting that possession alone, derived from an unrecorded donation, is insufficient against a registered title. This decision reinforces the principle that while donation transfers ownership, the act of registering the deed is crucial for asserting that right effectively against others.

Donation Doubts: When Does an Unregistered Deed Fail Against a Registered Title?

This case, Heirs of Rosendo Sevilla Florencio vs. Heirs of Teresa Sevilla de Leon, revolves around a parcel of land originally owned by Teresa Sevilla de Leon. In the 1960s, she allowed the spouses Rosendo and Consuelo Florencio to build a house and live on the property without rent. Later, in 1966, De Leon leased the land to Bienvenido Santos, assigning her leasehold right to the Second Quezon City Development Bank. After De Leon’s death in 1978, her heirs permitted Rosendo Florencio to continue residing on the property. However, in 1995, the heirs of De Leon demanded that Florencio’s heirs vacate the premises, leading to a legal battle when they refused.

The heirs of De Leon filed an ejectment case, arguing their ownership as successors of the registered owner. In response, the heirs of Florencio presented a Deed of Donation, purportedly executed in 1976, transferring the property from Teresa de Leon to Rosendo Florencio. This deed was notarized, but never registered. The Municipal Trial Court (MTC) initially dismissed the case for lack of jurisdiction, but the Regional Trial Court (RTC) reversed, ordering the heirs of Florencio to vacate. The Court of Appeals (CA) affirmed the RTC’s decision, casting doubt on the authenticity and veracity of the donation. This brought the case before the Supreme Court, which was tasked to determine who had a better right to possess the property: the heirs of the registered owner or the heirs of the alleged donee under an unregistered deed.

The Supreme Court began its analysis by reiterating the fundamental principle that in ejectment cases, the primary issue is physical or material possession, and any declaration regarding ownership is provisional. While the Court acknowledged that donation is indeed a mode of acquiring ownership under Article 712 of the Civil Code, the validity and effectivity of the donation in question were subject to scrutiny. The essential elements of a donation include the reduction of the donor’s assets, the increase in the donee’s assets, and the intent to donate. For immovable property, Article 749 of the Civil Code further requires that the donation be made in a public document, and the acceptance must also be in a public document, with the donor being notified of the acceptance in an authentic manner.

The Court referenced Article 749 of the Civil Code, stating:

In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy.

The petitioners argued that the notarized Deed of Donation fulfilled these requirements, thus transferring ownership to Rosendo Florencio. However, the Supreme Court sided with the respondents and highlighted several critical facts that undermined the petitioners’ claim. The most significant was the lack of registration of the deed. Despite the purported donation in 1976, Teresa de Leon’s title remained uncancelled, and the deed was never annotated on the title. This failure to register raised serious questions about the genuineness and the intent to transfer the property effectively.

The Court noted that if De Leon had genuinely intended to donate the property, she would have handed over the owner’s duplicate of the Transfer Certificate of Title (TCT) to Florencio. This would have enabled Florencio to register the deed and obtain a new title in his name. Furthermore, the Court questioned why Florencio, or his heirs after his death, waited for almost twenty years to register the deed. This inaction contradicted the typical behavior of someone who genuinely believed they owned the property.

Moreover, the Court found it peculiar that Florencio never informed De Leon’s heirs about the donation, and it was only raised as a defense in the ejectment case filed in 1996. The respondents continued to pay the real estate taxes on the property, while Florencio and his heirs never contributed to these payments. This further weakened their claim of ownership. The Supreme Court emphasized that the absence of the owner’s duplicate of the title and the lack of any reasonable explanation for its absence were telling.

In addition to these factors, the Court considered the affidavit-complaint filed by Valeriana Morente, one of the witnesses to the deed, alleging falsification and perjury against Florencio and the notary public. The Court also took note of a certification from the Manila Records Management and Archives Division, which stated that there was no record of the deed being notarized by Atty. Tirso L. Manguiat. The petitioners’ failure to provide a counter-affidavit from Atty. Manguiat further eroded the credibility of the deed.

In sum, the Supreme Court highlighted the following points:

• The deed of donation was not annotated on the title.
• Real estate taxes were consistently paid in the name of Teresa Sevilla.
• The deed’s existence was not recorded in the notary’s records.
• Signatures on the deed appeared dissimilar to known signatures of the parties.
• There was no explanation for the long delay in registering the deed.

Considering all these discrepancies and omissions, the Supreme Court concluded that the petitioners failed to prove a better right to possess the property than the respondents, who were the heirs of the registered owner. The Court affirmed the decisions of the lower courts, ordering the heirs of Florencio to vacate the property and pay reasonable rent from April 1995 until they vacated, as well as attorney’s fees.

This case underscores the significance of registering property transactions to protect one’s rights against third parties. While a deed of donation transfers ownership, it is the act of registration that provides notice to the world and secures the donee’s claim against subsequent claimants. As the Supreme Court emphasized, the rights of a registered owner generally prevail over those based on unregistered claims.

FAQs

What was the key issue in this case?	The central issue was whether the heirs of a donee under an unregistered deed of donation had a better right to possess a property compared to the heirs of the registered owner.
Why was the unregistered deed of donation considered insufficient?	The deed was deemed insufficient due to the lack of registration, failure to transfer the owner’s duplicate title, discrepancies in signatures, and the failure to pay property taxes by the donee or their heirs.
What is the significance of registering a deed of donation?	Registration provides public notice of the transfer of ownership, protecting the donee’s rights against third parties and subsequent claims on the property.
What happens if a deed of donation is not registered?	An unregistered deed may still be valid between the parties, but it does not bind third parties. The rights of a registered owner will generally prevail over those claiming under an unregistered deed.
What is the role of possession in property disputes?	While possession is an attribute of ownership, mere possession based on an unregistered claim is not sufficient to defeat the rights of a registered owner.
What did the Court order in this case?	The Court ordered the heirs of Rosendo Florencio to vacate the property and pay reasonable rent from April 1995 until they vacated, along with attorney’s fees.
Does this ruling mean unregistered deeds are always invalid?	No, unregistered deeds can still be valid between the parties. However, for enforceability against third parties, especially subsequent buyers or claimants, registration is crucial.
What evidence did the respondents use to challenge the deed?	The respondents presented evidence showing the lack of registration, continued payment of taxes in the registered owner’s name, a certification questioning the notarization, and alleged discrepancies in signatures.
How did the Court view the delay in registering the deed?	The Court viewed the significant delay (almost 20 years) as highly suspicious, questioning the genuineness of the intent to transfer ownership effectively.

This case serves as a critical reminder of the importance of diligently pursuing the registration of property transfers. While a deed of donation may appear to convey ownership, the failure to register it can leave the donee vulnerable to challenges from third parties, particularly those with registered claims. This decision reinforces the legal principle that registration is a cornerstone of property law, ensuring clarity and security of ownership rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Heirs of Rosendo Sevilla Florencio vs. Heirs of Teresa Sevilla de Leon, G.R. No. 149570, March 15, 2004